Bank of China International: Lowering Alibaba-W (09988) Target Price to HK$166 to Maintain “Buy” Rating

The Zhitong Finance App learned that BOCI released a research report stating that it maintained the Alibaba-W (09988) “buy” rating, but lowered the target price from HK$195 to HK$166. Alibaba fully showcased its end-to-end full-stack AI capabilities at the Yunqi Conference last week, aiming to operate more than 20GW of global data center production capacity in 2032.

The bank pointed out that market discussions mainly revolved around investment, ROIC, payback and potential capital financing. The bank roughly estimates that at this stage, the total production cost of each 1GW data center is about 22 billion to 30 billion US dollars, which can drive AI integrated cloud revenue of about 9 billion to 15 billion US dollars. It also believes that the company will reach 100 billion US dollars of external cloud revenue in 2030, and that external cloud revenue will exceed 170 billion US dollars in 2032.

The bank raised Alibaba's capital expenditure estimates for the 2027 and 2028 fiscal years to approximately RMB 230 billion and RMB 250 billion, and lowered the adjusted earnings per share forecast for the 2027, 2028 and 2029 fiscal years by 9.6%, 5.6% and 0.8%, respectively.